One of my best friends works for a defense contractor
namedILC
Dover. The company is most famous for the space suits it builds for
NASA, but they also do many other
projects, including fabric for lighter-than-air craft and military gas
masks.

On September 11, for example, my friend was in a small
Middle Eastern country that doesn't always
show up on maps, and
was stuck in transit for awhile.

As you might expect, he can't always talk about what
he's working on.

On a few occasions, however, he can proudly tell me
about some of his projects.

In
my golf column last week, I
suggested that the upcoming Masters Tournament has all the makings of a
three-ring circus.

First, there’s the
well-known campaign by Martha Burk and her group to force an opening for a
female candidate for membership in Augusta National. As part of that effort,
Burk applied for a demonstration permit for the Saturday of Masters weekend.

(At this point, there
is still no word on which
highly-paid woman CEO or similarly situated person possessing the normal Augusta
National membership pedigree (except for certain natural-born equipment)
might be using Burk for this purpose. I suggest this only because it’s hard
to imagine why Burk would push this issue for just any woman. After
all, membership in Augusta National is usually considered a rare, expensive,
and highly desirable jewel among the nation’s well-to-do golfing fanatics.)

Second, there’s the
me-too campaign by the Rev. Jesse Jackson, seeking a similar permit to show
solidarity with Burk’s group.

Third, there’s the
new campaign by some KKK wingnut also seeking a permit, allegedly to defend
the rights of the current members of Augusta National.

Neither the club nor
its African-American or other members are too keen about this “support.”

There are two other
demonstration permit applicants, both of whom seem to be aimed against
Burk's group.

This week’s Augusta
controversy involves the decision about where the circus rings will be
located, and which act will use which ring.

Burk’s group and the
ACLU filed suit against the use of the local government’s newly enacted
demonstration ordinance, as well as the decision by Sheriff Ronnie Strength
to limit the demonstrations to a site about a third of a mile from the main
entrance to Augusta National.

In golf terms that’s
about 586 yards, or a very long par 5 from the action.

"We made a
very reasonable request to protest peacefully in an area near the front
gates," Burk said. "The area where they're trying to push us is designed
to keep us away from the front gates, and away from the people we are
trying to influence. The property where they want us to protest is owned
by the club, which indicates that the club may be influencing the
decisions being made on this issue."

Burk also displayed
a youthful sense of fairness on the issue of which circus ring her group
deserved:

Burk said she thought her organization should take precedence over
anyone else because it was the first to apply for a permit.

"I believe that everyone should understand the concept of first come
first served," Burk said. "The fact that other groups want to protest in
the area that we asked for first should be irrelevant."

The
local paper helpfully provided an overhead graphic that shows the
problem nicely:

This graphic makes it
obvious that there’s not much room near the club’s entrance for anything
beyond tournament visitor access. No matter who wants to demonstrate, there
is the additional important issue of preserving emergency vehicle access to
the site during the crowded conditions when the Masters tournament is
underway.

The sheriff's
explanation makes sense, as often happens with a public official stuck
between a rock and a hard place:

"The city of Augusta owns no property in this area, and this is the
closest open space to the club entrance that would be safe for everyone
and enable the city to treat everyone requesting a permit the same," the
sheriff said.

Notwithstanding the
probability that the sheriff is acting in complete good faith, I think the
judge hearing the injunction request will not uphold the current permit
conditions. Based on my modest experience with picketing cases, there will
be a more closely defined effort to find a demonstration location that is
fairly safe, and much closer to the club’s entrance.

For example, Jersey
barriers could be put in place along Washington Road, just for this purpose.
It’s possible that Burk and her friends, and her opponents for that matter,
could be restricted to a narrow corridor of pavement opposite the club,
perhaps near the intersection with Eisenhower Drive.

Ms. Burk’s current
goal is to provide maximum inconvenience and maximum negative publicity
against the club, as she continues her attack against its members’
constitutional rights to freedom of association.

Nonetheless,
I don’t believe the District Judge will keep Burk’s group a combined driver,
three-wood and a good mid-iron away from the famous Magnolia Lane.

I also don’t believe
the court will give Burk’s group the opportunity to put others’ lives at
significant risk, for the sake of an argument about which genders of rich
persons should belong to Augusta National.

As I read
the
decision, it’s pretty clear that this was a case of missed opportunity.

About five years ago,
lawyers practicing in Jonesboro, Georgia
challenged a similar city occupation tax, and won:

[M]unicipalities may
impose an occupation tax that includes lawyers within its scope so long as
the tax is a revenue measure only and does not act effectively as a
precondition or license for engaging in the practice of law.

Shortly thereafter, Atlanta amended its
tax ordinance to try to avoid a similar holding. The city just didn’t go far
enough, under the Georgia law concerning who may actually regulate the
practice of law:

[W]e agree with the
trial court that Atlanta’s ordinance remains indistinguishable in effect
from the [Jonesboro] ordinance…: payment of the tax is a precondition to
the practice of law, and incarceration for practicing law without payment
of the tax would impede the practice of law ….

To make matters worse for Atlanta, this
latest Supreme Court decision is retroactive:

As the trial court
cogently noted, Atlanta was clearly aware of the [Jonesboro] ruling … and
could have chosen a tax scheme that did not act as a precondition to the
practice of law (the trial court suggested that taxing for the previous
year rather than the coming year would suffice), but did not. In addition,
as the appellees point out, Atlanta has had the use of the money it
collected under the occupation tax ordinance and the lawyers from whom it
was collected have lost that use. Weighing those equities, we are not
persuaded that justice requires prospective application.

AJC reporter Steve Visser quoted the
City Attorney saying that the potential tax refund could be a"very big"hit to the city.

It also looks to me that from a legal
perspective this result didn’t have to happen.

Even the trial court pointed out how the
ordinance could be amended to avoid conflicting with the Georgia attorney
regulatory scheme.

In addition, I really doubt that a general
gross receipts tax that applied to attorneys would run afoul of the Georgia
constitution. It’s a valid way to tax service industries, and it can be
applied universally regardless of the business or profession.

If it’s structured correctly, a gross
receipts tax simply won’t act as a precondition to the practice of law. It
taxes the aftereffect of the practice instead—the money paid to the
attorneys by their clients.

As currently set up, the Delaware version for many businesses and professions is set as a monthly payment of
0.384% of gross revenues, with a $50,000 monthly deduction before any tax is
due.

As a source of
revenue, the gross receipts tax does very nicely, thank you.
In
Delaware it’s been bringing in roughly $140 million per year.

I just have to wonder
what Atlanta’s political dynamics were that kept the city from fully
altering its occupation tax system before this litigation and its fiscally
painful result.

March 11, 2003Finding the money by not paying for it in the first
place

This finding-the-money stuff is becoming a bit of a
series at this site, isn’t it?

In the last several months I’ve
posted occasionalpieces about the different
ways that state and local governments
search for revenue to deal with their current budget woes.

It just so happens that this week I’ve been working
with my clients on an assignment that’s not so much finding new money, but a
tried-and–true method to not needing it in the first place--by not paying as
much for it.

The
Delaware
Transportation Authority will soon go to the bond market for a new sale
of its Transportation Revenue Bonds, and compared to the size of their usual
issues it’s likely to be a fairly hefty one. The current plan is to use
almost half the proceeds to refund DTA bonds first issued in 1993, resulting
in huge savings in debt service interest costs.

The DTA is not the first government to do this by
any means. Hundreds if not thousands of governments are using the same
tactic that millions of homeowners use when market conditions
warrant—refinancing to take advantage of historic lows in interest rates.

Unlike homeowners, however, there are strict tax
laws that limit the number of government debt refinancings that can be done
without ugly tax consequences.

On the other hand, since tax-exempt issuers already
pay fairly low tax-advantaged rates, one can easily imagine just how cheap
the new debt service payments will be compared to twenty years ago.

I took a look at the
daily activity listat Moodys for March 10.
Among the 45 issues scheduled for that day, the announcement titles for at
least one quarter of the bond sellers directly state that the purpose of the
issue is to refund or refinance their old debt.

My clients’ 2003 Series Transportation Revenue Bonds
don’t announce in the title that refunding the 1993 bonds is one of the
proposed uses of the new money. That information is contained in the
Preliminary and Official Statements, among other formal documents. If DTA’s
approach to divulging its plans is common, that one-quarter group in
yesterday’s Moodys’ list is probably a conservative estimate of those who
are also refinancing for significant savings.

Other transportation agencies are joining in the
fun. For example,
New Jersey
plans to refinance a large portion of the $2.8 billion in outstanding debt
now owed by the New Jersey Turnpike and the Garden State Parkway.

Refinancings simply don't carry the same enticing
cachet for the media as other government policies and practices. Even so,
the millions of dollars that taxpayers save through this back-office
technique is money they don't have to pay toward the cost of the government
they choose to have.

As it lowers the carrying cost of government, it
also saves money that nervous legislators and governors don't have to
request with new taxes and fees.

That combination makes it a pretty practical
solution, as I see it.

March 11, 2003When it comes to some aspects of human nature, we’re
all experts

The Delaware Supreme
Court issued
a fairly blunt opinion on March 5 that reversed a trial court’s order
dismissing a plaintiff’s slip-and-fall case.

It was all about
cutting corners and the legal requirements for expert testimony.

A woman left a motel
and walked toward a nearby restaurant, on her way to buying a newspaper at a
vending machine on the side of the restaurant. She didn’t remain on the
sidewalk, but instead cut the corner across a bit of landscaping. She
claimed she tripped on a 2-inch high piece of landscape edging and fell
down, injuring herself.

In pre-trial motions,
the restaurant tried to force the plaintiff to present detailed expert
testimony about the actual tripping hazard presented by the edging. The
trial court agreed. She then found a civil engineer willing to present such
evidence, but the restaurant then challenged certain aspects of the
testimony the engineer planned to present. A second trial judge (the first
one had retired) agreed with the restaurant a second time, and excluded the
testimony. This effectively cut a corner in the legal proceedings, by giving
the restaurant a pre-trial order dismissing the suit.

On appeal, however,
the Supreme Court disagreed. It discussed the now-common standards for
expert testimony in light of Daubert, 509 U.S.
579 (1993), along with opinions from other jurisdictions, and held that this
simply wasn’t a case where expert testimony was really necessary:

[W]e all know people cut corners.
We may not know how frequently people cut corners, or what personality
types are most likely to cut corners, or how close to the corners people
tend to make the cut. Any of those additional facts might require expert
testimony. The basic fact that people cut corners, however, does not.

Properly viewed, [the] expert
opinion relates only to the fact that designers should take into account
pedestrian walking habits; and that, given people’s tendency to cut
corners, the landscape edging should have been low enough to avoid being a
tripping hazard for those who took the short cut.

The case now goes back for a
trial.

In the meantime, of
course, businesses that face this risk of human nature can always exercise
the option to use landscaping that would make the corners a bit more
difficult to cut, thereby reducing the chance for injuries and lawsuits.

State ethics
rules for lawyers recognize that private practitioners have a
responsibility to be zealous in representing a client’s position.

The limits of that
responsibility are not always discernible under a “bright line” test. It’s
more of a continuum. Even so, some lawyers engage in conduct that doesn’t
necessarily go beyond zealous to something completely unethical, but
nonetheless fails to meet clients’ real needs.

The parties were
involved in a heated dispute over exactly what kind of copyrights to
software were actually obtained in a bankruptcy court sale. The plaintiff
company argued that it retained the copyright, while the defendant company
argued that it either fully obtained the copyright in the sale, or at least
obtained sufficient rights to do what it was doing with the software.

One primary legal
issue dealt with how the term “nonexclusive” was understood and applied to
the case, a matter of intellectual property law beyond the scope of this
post.

Any doubt about the meaning of
“nonexclusive” is dispelled by the exchange over the term between the
lawyers and the bankruptcy judge, after the critical passage, elided by
ITOFCA in its brief, is restored….

Ouch.

When a court points out that your side
edited out a vital portion of the record below, that’s a real problem. The right thing to
do, even though often more difficult, was squarely face the issue presented in that
record.

Playing hide the ball, especially when
both the other side and the judge's law clerks can easily detect it, is not
zealous representation. It's closer to stupid on the way to totally wrong.

Even if somehow this was an innocent
editing error, the fact that the court discovered it can’t help but
influence the judges reviewing the case. It’s especially important in close
cases, where the law and/or the facts could be fairly interpreted to support
either side.

I would like to say that I’ve never seen
this happen in any litigation in which I’ve been involved, but unfortunately
I can’t. I suppose the temptation to cut a corner in one’s advocacy can be
overwhelming at times.

When these sins of omission occur,
however, it’s something that the other side’s attorney should point out, as
part of his or her own ethical responsibilities.

Sometimes you wish
folks would just stop, take a slow deep breath, and think about how their
attitude appears to others. It might just help them decide to use another
approach to persuading other people to accept their position, or at least
help in crafting a compromise.

The NYT ran a fascinating story about a San Francisco conflict between
tree-huggers and sand-huggers.

The U.S. Fish and
Wildlife Service is proposing to remove 3,800 cypress and eucalyptus trees
from the Presidio National Park, as part of a plan to restore sand dunes to
the area. That’s about 3.8% of the total trees in the 1,480 acre park, a
beautiful and popular part of the Bay Area. The Army planted the original
trees in the 19th Century, when the Presidio was a military
installation.

The FWS has its
reasons:

The dunes are immeasurably older than the trees and are home to an
endangered species: the San Francisco lessingia, a delicate bell-shaped
yellow flower that flourishes in wind-swept sand….

The draft plan calls for increasing the lessingia habitat by removing
more "wind obstacles" (translation: trees). The trees, on the hillside
above the dunes, include stands of Monterey cypress, their wind-sculptured
limbs and fanning branches a symbol of the Northern California coast.

A prior restoration experiment on about
13 acres increased the number of endangered flowers in the area from about
600 to over a million, according to the NYT report.

It’s not just the wind that’s stirring
up. Tree-loving environmentalists have a real case of the flutters about the
idea:

When the draft plan was unveiled last year, a San Francisco Chronicle
columnist wrote of "sand-hugging zealots" and a future of sand "hurling
across a barren landscape."

The attitude from those favoring the
plan is equally touchy:

Environmentalists have scorned the eucalyptus trees as a troublesome
invasive species.

Those dune-friendly claims didn’t sit
well with Leland Yee, a city supervisor:

"Plants and trees without the proper papers to show their pre-Mayflower
lineage are called `invasive exotics' and are wrenched from the soil to
die," Mr. Yee, now a member of the State Assembly, fumed in an op-ed piece
he wrote for a community newspaper last year. "How many of us are
`invasive exotics' who have taken root in the San Francisco soil, have
thrived and flourished?"

The real story, of course, is that the
Presidio is home to a variety of environments, altered by the hand of man
over many years. Each micro-environment has its own merits, and the FWS is
now trying to figure out the best way to maintain a balance of interests
among the flora and fauna now inhabiting the park.

On its face, the Service’s proposal
seems pretty modest. It suggests a 3.8% reduction in the current
number of trees, in favor of an increase in the amount of dune space in the
Presidio. That’s not a huge impact, but its opponents apparently don’t want
any reductions. On the other hand, those favoring the dune proposal probably
didn’t win a lot of converts with that talk about “invasive species,” a term
which is scientifically correct but none too diplomatic.

(I suppose one could say that both of
these two groups have developed a “fight them on the beaches” mentality, but
that would be a really bad pun, wouldn’t it? Irresistible, but nonetheless
bad. Sorry.)

For those whose work requires frequent
contact with environmental regulators and/or activists, the self-righteous
attitudes on both sides of this controversy will seem all too familiar. The
irony is that in this case both tree-huggers and sand-lovers are smarting
from being subjected to the superior tone they so often display to others,
who may not share their sense of proportion about matters environmental
compared to other social issues.

The other intriguing irony about this
controversy is that it illustrates the all-too-human resistance to change.
These folks seem to forget, however, that a seaside environment left to its
own devices changes constantly.

We have a similar
tree and dune environment mix here in Delaware, with a similar pedigree to
the Presidio, but on a scale a little more than three times the size of the
San Francisco landmark.

Years ago the Army
planted 40,000
Japanese
Pines among Cape’s sands and dunes, mixing them with the native loblolly
pines and the few other plants that could live in the harsh sand/salt water
environment. These non-native trees are subject to attack from a native
nematode, however, and struggle to last longer than 25 years. Still, the
forested areas are now viewed by most folks as a beautiful addition to the
park.

The dunes at Cape Henlopen are impressive environments in themselves. Several of them are known
as “walking dunes”, moving slowly west from the beaches and the ocean to the
east.

Thus far the state natural resources
department hasn’t experienced the same intensity of environmental infighting
about Cape Henlopen Park that the FWS
will have to address as it completes the plans for the Presidio.

Cape’s most recent environmental
controversy concerned long-time plans for a bike trail that would use some
of the forested area, while skirting some of the marshland on the western
edge of the park’s 5,000 acres. After a lot of work, including some
effective diplomacy and compromises, the bike path is now well underway.

It’s a bit much to expect everyone to
agree on the proper balancing of a host of competing environmental policies.
Nonetheless, many folks in the environmental movements could achieve more of
their goals with less effort if the attitude they displayed to others was
less holier-than-thou and more how-are-thou. Some of them might just gain
this insight from their experience with this Presidio problem.

Official small print disclaimer: This is, after all, a personal web site. Any
opinions or comments I express here are my own, and don't necessarily reflect the official
position of my work as a government attorney or any of my clients.

That fact may become obvious later on,
but it needs to be said here anyway.